Air India is facing an estimated loss of ₹4,000 crore due to the continued closure of Pakistani airspace to Indian carriers, according to CEO Campbell Wilson. The airspace restrictions, which began in April following the Pahalgam terror attack that killed 26 people, have forced Air India to reroute flights to Europe and North America, resulting in increased fuel consumption, higher crew costs, and longer turnaround times.

The ban, which affects both commercial and military aircraft registered or operated by India and Pakistan, has particularly impacted Air India's most lucrative international routes. Flight durations on routes connecting India to Europe and the US have increased by an average of 60–90 minutes. This has led to a significant strain on the airline's resources during what has already been a challenging year.

CEO Campbell Wilson highlighted the financial impact at a recent event, stating that the "(Pak) airspace closure is causing an impact of ₹4,000 crore to Air India". He also addressed the Ahmedabad air crash that occurred earlier in the year. Wilson expressed his devastation regarding the June plane crash, emphasizing the airline's support for the affected families and staff. He noted that an interim investigation found no issues with the aircraft, its engines, or the airline's operations.

The closure of Pakistani airspace initially occurred on April 24, and was extended several times. This followed India's suspension of the Indus Water Treaty with Pakistan. In response, both countries banned the other's aircraft from using their respective airspaces.

Despite the challenges posed by the airspace closure and other events, Air India continues to operate and support those affected. India has planned a major tri-services exercise, with a NOTAM issued from October 30 to November 11 for large parts of Rajasthan and Gujarat.